Top 5 Credit Management Tips in a Covid-19 World

Credit Management Tips in a Covid-19

Most businesses are going through an uncertain phase where taking care of your finances is of utmost importance. Having a business credit management policy can help you avert risk. A lender may have taken credit a long ago, but now they are unable to pay. Their reasons could be genuine, but you need money to run your business operations.

It’s wise to follow some credit management tips that can help you settle payments with clients or avoid the risk of getting into the debt trap. Let’s know more about it.

Communicating consistently

If a party owes you money, it’s crucial to keep communicating with it, so it remains at the top of their minds to pay you back. We are not talking about emails only. You can use chats and instant messaging too. While sending emails, you can share invoices, payment records, etc.

Invoicing timely

As said earlier, it’s an uncertain phase for most of us. So, you can play safe by doing the right things that assure you never go out of cash. It begins with invoicing timely. While you learn some business credit management techniques on your own, you can use these tips to work better. Generate and send invoices on time so you can know when you can expect payments.

Evaluating your customer base

It’s the COVID-19 we are talking about, and one must make no mistake when it comes down to running a business. Before approving credit, you must check if your customers are eligible to take credit. If not, you must politely refuse. As a business owner, you want to lend funds to those who can pay you back timely. If you think so, you’re on the right track. You can review their business credit information report too.

Setting a payment deadline

One of the best credit management tips one can offer you during COVID is setting a payment deadline. Stick to a date when you want to receive the payment. You should mention it in your contract too. For special reasons, you can show leniency; however, you must be strict with those who have defaulted in the past.

Shaking hands with a credit information bureau

If a debtor is delaying payment not paying you at all, you can approach a credit information bureau. In this COVID crisis, you need money now more than ever. And if it’s your hard-earned money, it should reach your bank accounts. For example, if your vendor has not paid you for the last six months, it’s time to take some action. Instead of walking the legal route, which may consume time and waste money, you can work with a credit bureau to get the job done.

CreditQ is a leading credit information bureau that can expedite the payment follow-up process on your behalf. If we talk about the benefits of MSME in India, one can review a client’s business credit report and score. Besides, you can get help in the payment settlement process too.

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